Amanda Cooper
LONDON (Reuters) – Bitcoin fell for a third day on Wednesday, posting its worst monthly performance in April since late 2022, as investors pulled money out of cryptocurrencies ahead of a Federal Reserve interest rate decision later.
The value of the world’s most traded cryptocurrency fell nearly 16% in April as investors took profits on a wild rally that sent the price to an all-time high above $70,000.
was last down 4.7% at $57,055, its lowest since late February, while Ether’s losses were more modest, down 3.6% at $2,857, also its lowest since February.
Bitcoin’s price is now a full 22% below its March record of $73,803, technically putting it in a bear market. But it’s still up 35% this year and twice as much as last year, thanks in large part to the billions of dollars flowing into newly created exchange-traded funds since January.
“The recent downtrend can be attributed to increased profit-taking by investors who entered the market during the 2022 and 2023 downturns, as well as ETF investors who witnessed significant gains in their share prices after entering the market in the early weeks of 2024. ” said Fineqia analyst Matteo Greco.
On the macroeconomic front, the Fed is not expected to make any changes to interest rates later, but there is a growing view among investors that the central bank may not cut rates at all this year, dealing a blow to interest rate-sensitive assets such as like cryptocurrencies, emerging market stocks and bonds, or even commodities.
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Investors reacted accordingly. The ten largest spot Bitcoin ETFs in the US have seen their biggest weekly outflows since their inception in January.
Outflows reached $496 million this week, largely as flows into BlackRock’s (NYSE:) iShares Bitcoin Trust, the largest by assets, slowed, according to LSEG data.
Bitcoin’s so-called “halving event” last month did little to support the price. Since April 20, when the halving occurred, Bitcoin has fallen by about 15%. Many investors have flocked to the market ahead of the event, which involves changes to the cryptocurrency’s underlying technology and is intended to slow the rate at which new bitcoins are created.